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Balfour Beatty takes out the trash with £800m deal

The UK developer has emerged as the frontrunner to build and operate a new waste management facility in Essex, England. Financial close is expected during the first half of the year.

UK infrastructure developer Balfour Beatty and waste manager Urbaser inched closer last week to winning the Essex Waste Partnership’s Residual Waste Treatment project, a public-private partnership (PPP) contract that calls on the private sector to build and operate a new waste treatment facility in Essex, England.

The preferred bidder consortium – in which Urbaser owns 70 percent and Balfour Beatty the remaining 30 percent – will put up over £23 million (€28 million; $36 million) in equity to help fund the £800 million contract, Balfour Beatty said in a statement.

The remaining amount will, presumably, come in the form of bank debt and/or public subsidies, but the UK developer did not elaborate further on the funding structure, adding only that the deal is expected to close during the first half of the year.

Once operational, the new facility will be able to process up to 417,000 tonnes of municipal waste a year and will “incorporate a visitor and education centre for the benefit of the local community,” Balfour Beatty said. The contract will last for 28 years.

For Balfour Beatty and Urbaser, the Essex waste facility preferred bidder announcement comes hot on the heels of the award for the construction and operation of a similar facility in Gloucestershire, which took place three weeks ago.

Balfour Beatty chief executive Ian Tyler remarked in a statement that “the Essex award demonstrates the breadth and flexibility of our investment business model and further strengthens our position in the growing waste sector”.